Guest mouse is not working after installing VB extensions

Converted a physical laptop computer, running Windows XP, which is part of domain, using VMWare Convert. Output files where written into a Linux SMB shared directory. Original hardware is a IBM ThinkPad T60.

After conversion finished, VMDK disk was added to VB Media Manager.

New VB guest created using previous VMDK as boot disk

Guest powered on and worked perfectly.

Installed VB Guest Additions

Guest restarted.

Keyboard working. Guest mouse is stuck at lower right corner.

Windows is finding a new PCI device but is incapable of finding the right drivers

When keys on the keyboard numeric key pad are pressed, Windows is moving focus to something else that I can't identify